Raising the Rate of Minimum Wage

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1 Raising the Rate Raising the Rate of Minimum Wage Christeon McClelland American Intercontinental University English Comp I August 25, 2021

2 Raising the Rate of Minimum Wage In a competitive economic world, the level of income is vital to the survival of humans. Contrary to the traditional era where everything was cheap, people in the current generation need to pay more for almost everything. Increased mortgage, medical bills, fuel, and education bills are all expenses that need to be paid. However, while costs increase, the number of minimum wages remains low. The minimum wages concept (referred to as the federal minimum wage) in the USA was set in 1938 by Franklin D. Roosevelt at $0.25 an hour. Ever since the minimum wage has undergone more than 22 Congress amendments but has only increased to $7.25 an hour. Compared to the fluctuations in the cost of living, the increased margin is too low for low- income employees to live comfortably. The minimum wage laws establish a base level of pay that employers must pay certain covered employees. To many scholars, this minimum income is the cause of the increased poverty levels witnessed across the US. The initial purpose for minimum wage policy development was to stabilize the post-depression economy and protect the workers in the labor force. Additionally, it protected the health and well-being of employees. The federal minimum wage of $7.25 per hour has not changed since 2009. Increasing it would raise the earnings and family income of most low-wage workers, lifting some families out of poverty—but it would cause other low-wage workers to become jobless, and their family income would fall. Therefore, the minimum wage should be raised so that families can escape poverty. Any income is preferable to NO income, but we need to ensure the amounts fit the cost of living.

3 Increasing the minimum wage in each state would potentially raise families out of poverty and encourage more people to work to support their families' lifestyles. One of the key impacts of low minimum wage is poverty. Increasing the federal minimum wage can lower the poverty level, give people hope and decrease public use. Keeping the minimum wage as an option for any job can encourage families to remain impoverished. Based on the international labor report (2020-2021), millions of people work at low-paying jobs like serving food in restaurants, caring for the elderly, and delivering pizza's yet they are expected to care for their families and still pay for their college education. In most cases, the minimum wage brings families to a halt and forces them to live paycheck to paycheck. Public housing supports those with low incomes and minimum wages. Still, it also disadvantages those who want to do better for themselves but refuse to give up their government benefits until they increase their income. With the labor market being so competitive these days, it might be difficult for individuals to obtain positions that pay more, to begin with. However, if the minimum wage was to be increased, families would be able to earn more, save, and live in better areas. Secondly, the cost of living does not match the minimum wage numbers. People require money to live comfortably. The minimum salary does not even cover some people's monthly costs. Consider this: Imagine working for eight to ten hours a day and your supervisor handing you $7.25 for all your efforts that day. That's even fewer than the number of hours worked. “By boosting the income of low-wage workers who had jobs, a higher minimum wage would raise their families’ real income, lifting some of those families out of poverty.” (cbo.gov, 2021). Working for minimum wage is equivalent to modern-day slavery. In the slavery era, people used to work for less yet be

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4 required to pay more taxes which resulted in increased poverty. Similarly, in the current modern era, people are working for low minimum wage yet taxes and increased living cost takes all their remaining pay. People work hard all day for little to nothing in return. All employment should at the very least take into account the cost of living in the selected state. If the cost of living in that state is high, the minimum wage should be high. If the result has only harmed working Americans' lifestyles to provide for their families, the minimum wage should be abolished. There is no purpose in having a minimum wage payment option if the income is not benefiting those who rely on it. Working people should be paid at least $15 per hour. Making this much per hour will cover at least a couple of additional bills during the month. People can keep at least one check for themselves and use the other to pay their expenses with the amount. Based on Luca & Luca, (2019) article, improving the minimum wage would raise the standards of living as well. Some of these scenarios are as follows: “removing people from public assistance, raising consumer spending, and enhancing public health.” Lastly, the Minimum wage should be taken away. The minimum wage clause has been used by many employers to manipulate rather than form a base for employees' wage increments. Based on the Economic Policy Institute (2021), countries that have increased their minimum wages have seen positive effects. Each state's governor and residents should have a more in- depth discussion on the minimum wage. Because of inflation, several governments cannot afford to boost their minimum wage. It is believed that an increase in the minimum wage causes an increase in living costs which basically is inflation. Those opposing the concept of minimum wage increment say that many businesses cannot afford to pay their workers more and will be forced to close, lay off workers, or reduce hiring (ProCon.org, 2020, June 22). Many businesses

5 are opposed to paying more than they can sustain or bargain for, yet a business to grow requires many employees, and those individuals deserve more than minimum wage. “Proponents of raising the minimum wage argue that the current federal rate is too low and not commensurate with the rising cost of living, pointing to its peak purchasing power in 1968 at over $12 when adjusted for inflation.” (Draeger, 2021) If the state cannot afford to give its residents a livable wage, some of its unnecessary resources should be removed. By removing some amenities like congress member vacations and other allowances can allow the government to relocate the saved resources to increasing minimum wages. Several fast-food restaurants, liquor stores, gun stores, and pawnshops should be reduced from communities to prioritize essential resources. Several states like Mississippi, Louisiana, and South Carolina have totally done away with the minimum wage concept. To them, the wage should be measured based on the deliverability and efficiency of the employees (The Economic Policy Institute, 2021). Conclusively, the minimum wage issue has caused most Americans headaches. Most employers have used this concept to take advantage of their employees. Additionally, the minimum wage ideology has sunk most people into poverty. The minimum wage has not yet reached $15an hour shows how much the employer community has exploited employees. Based on The Economic Policy Institute (2021), the highest so far is $12. The increase in living standards should resonate with the wages people receive. Living comfortably is impacted by the amount of savings people have. I believe that the federal minimum wage should be eliminated or increased so that low-income employees can stop living from paycheck to paycheck.

6 References How increasing the federal minimum wage could affect employment and family income. Congressional Budget Office. (2021, April 5). https://www.cbo.gov/publication/55681. Legal Information Institute. (n.d.). Minimum wage. Legal Information Institute. https://www.law.cornell.edu/wex/minimum_wage. Luca, D. L., & Luca, M. (2019). Survival of the fittest: the impact of the minimum wage on firm exit (No. w25806). National Bureau of Economic Research. Pros & Cons - PROCON.ORG. Minimum Wage. (2020, June 22). https://minimum- wage.procon.org/ . Saige Draeger, L. K. (n.d.). Increasing the minimum wage. https://www.ncsl.org/research/labor- and-employment/increasing-the-minimum-wage.aspx . Staff, A. I. (2021, June 8). Controversial topic: Minimum wage. Academic Influence. https://academicinfluence.com/inflection/influence/controversial-topic-minimum-wage . The Economic Policy Institute (2021). Minimum Wage Tracker. https://www.epi.org/minimum- wage-tracker/#/min_wage/Rhode%20Island

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